Cooper Tire & Rubber Co. will sell its 65% ownership in Cooper Chengshan (Shandong) Tire Co. Ltd (CCT) to Chengshan Group Co. Ltd. for approximately $262 million.
“Resolving the ownership of CCT has been a key goal for us, and we are pleased to have it completed as we continue to execute our long-term growth plans for China,” says Cooper Chairman, Chief Executive Officer and President Roy Armes.
“With the closing, offtake agreements go into effect under which CCT will continue to produce Cooper-branded products, including Roadmaster tires, through mid-2018. The purpose of the offtake agreements is to provide a secure source of product while also allowing Cooper the flexibility to continue to identify and develop alternative sources for these tires.”
Cooper’s sourcing options range from an an agreement with another supplier, a joint venture, an acquisition, adding capacity to other facilities, buying a facility and running it, or building a new plant, according to Armes.
“We have the financial capacity to take any of these paths or a combination that best serves our business and our customers,” he says.
The company says the selling price is net of taxes and includes dividends in accordance with its option agreement. Cooper will file pro forma financial statements in conjunction with a Form 8-K related to the transaction with the U.S. Securities and Exchange Commission (SEC) in a few days.
Dec. 4 webcast
Cooper will host a webcast on Thursday, Dec. 4, to discuss the financial and business implications of the CCT transaction and the preliminary countervailing duties on certain passenger and light truck tires imported into the United States from China.
The webcast is scheduled for Dec. 4 at 4:30 p.m. EST.
To access the webcast, visit the investor relations page of the company’s website at www.coopertire.com. The webcast will be archived and available for 30 days.
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